Japan Pharmaceuticals and Healthcare Report Q1 2012

Japans pharmaceutical market is proving to be a welcome refuge for the leading multinational drugmakers, which are experiencing austerity-induced revenue contractions in Western Europe and healthcare reform costs in the US. Despite numerous operating challenges in Japan, most notably delays to the introduction of innovative medicines, known as the drug lag, pharmaceutical sales are forecast to remain robust over the medium term.

Headline Expenditure Projections

- Pharmaceuticals: JPY9,525bn (US$109.3bn) in 2010 to JPY9,961bn (US$126.9bn) in 2011; +4.6% in local currency terms and +16.1% in US dollar terms. Our forecast has been revised up from Q411 due to macroeconomic factors, new historic data and additional analyst intervention.

- Healthcare: JPY39,432bn (US$452.3bn) in 2010 to JPY39,718bn (US$506.0bn) in 2011; +0.7% in local currency terms and +11.9% in US dollar terms. Our forecast has been revised up from Q411 due to macroeconomic factors.

- Medical Devices: JPY2,755bn (US$31.6bn) in 2010 to JPY2,827bn (US$36.0bn) in 2011; +2.6% in local currency terms and +14.0% in US dollar terms. Our forecast has been revised up from Q411 due to macroeconomic factors.

Business Environment Rating

Japans Pharmaceutical and Healthcare Business Environment Rating (BER) score increased from 68.9 in Q411 to 72.4 in Q112, underlining its status as the most attractive market in the Asia Pacific region. The upgrade was primarily due to a revision in the pharmaceutical market forecast, which was caused by increased US dollar growth due to the strengthening yen. We expect another upgrade in Q112 as we have reappraised the countrys pharmaceutical regulatory regime.

Key Trends And Developments

- In September 2011, Santen Pharmaceutical was set to purchase French pharmaceutical ophthalmic company Novagali Pharma for EUR100mn (US$136mn). Santen will acquire a 50.55% stake in Novagali from investment funds and other major shareholders for EUR50.7mn (US$69.0mn) and then launch a tender offer to purchase the remaining shares by the end of 2011 after receiving approval from French authorities. According to Santens chairman and CEO, Akira Kurokawa, the acquisition will allow the company to expand its global footprint, which is one of Santens major strategic objectives through to 2020.

- Also in September, Swiss pharmaceutical company Acino signed an exclusive license agreement with Sawai Pharmaceutical for the development and distribution of one of its key oncology products in the Japanese market. The product will be developed by Acino at its manufacturing site in Miesbach, Germany, while Sawai will develop and distribute it in Japan. Acino CEO Peter Burema said the agreement will enhance both companies mid-term growth opportunities and strengthen Acinos geographical expansion drive.

- In July 2011, Fujifilm and Dr Reddys Laboratories formed a joint venture (JV) to penetrate Japans highly promising but increasingly competitive generic drug market. The Indian firm will bring expertise in cost-competitive production technologies for active pharmaceutical ingredients (APIs) and finished medicines, while Fujifilm will contribute experience in advanced quality control and considerable knowledge of the local business environment. Tokyo-based Fujifilm will have a 51% stake in the JV and Dr Reddys will own the rest. The first products will be launched in the next three to four years, the companies said.

Economic View

The Japanese economy registered its third consecutive quarter of decline, coming in at 0.5% quarter-on-quarter (q-o-q) in Q211 from 0.9% q-o-q in the preceding quarter as the country continued to suffer from the after-effects of the March 2011 earthquake and tsunami. As a result, we maintain our view that the economy will contract by 0.7% for the whole of 2011. While reconstruction efforts will lead to a growth boom in late 2011 and 2012, the rebound should be relatively weak at 1.8% in 2012.

Political View

Japans political scene will be more unpredictable in the 2010s now that the country has moved beyond sole rule by the Liberal Democratic Party (LDP). However, it is far from clear whether Japan will develop a competitive two-party system, or whether one-party rule will re-emerge with one of the major parties. It is questionable whether any political force can address Japans colossal economic woes, which have been exacerbated by the Tohoku earthquake, tsunami and nuclear disaster.

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Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

The Japan Pharmaceuticals & Healthcare Report features our forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.

- Benchmark our independent pharmaceutical and healthcare industry forecasts for Japan to test other views - a key input for successful budgeting and strategic business planning in the Japan pharmaceutical and healthcare market.- Target business opportunities and risks in the Japan pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Japan.- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.

Coverage

Executive Summary & Industry SWOT

An at-a-glance perspective on latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The SWOT outlines strategic factors which affect our forecast analysis, and taken together with our political, economic and business environment SWOTS, it gives a complete overview of market climate.

Market Summary

Snapshot of key market characteristics, including total size of pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape.

Regulatory Regime

Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as an analysis of the overall regulatory burden.

The competitive landscape section provides comparative company analyses and rankings by US$ sales and % share of total sales - for the total pharmaceutical sector, as well as the OTC, generics, and distribution sub-sectors.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of our industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

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Call us on +44 (0) 203 086 8600

Select License Type

£842.50

Electronic License

Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

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